‘Problem patients’ hinder Medicare reforms

By Matthew Heimer

There’s more to the Affordable Care Act than those Obamacare health exchanges. To grapple with the handful of high-risk patients who tend to generate the most costs–in the health-care system in general and in Medicare in particular–the ACA launched an “accountable care” pilot program that encouraged hospitals and doctors to team up and monitor those patients more closely. As The Wall Street Journal’s Melinda Beck notes in an interesting feature this week, the program is showing some promise—but there’s only so much doctors can do when the patients don’t cooperate.

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Costs could fall–but only if patients play ball.

According to government data cited by Beck, the most expensive 1% of patients account for about 22% of American medical spending each year. Many of those big-bill consumers are people with chronic ailments like heart disease and diabetes, and one premise behind accountable care organizations, or ACOs (which are also gaining a foothold outside of Medicare), is that tighter management of those people’s health problems will cut overall costs.

Beck visits the ACO at Mount Sinai Medical Center in New York City, and portrays one woman who’s a case study in how such a program is supposed to work. The woman, a former teacher who has diabetes, congestive heart failure and coronary artery disease, ran up more than $40,000 in Medicare bills last year, primarily due to her 12 emergency room visits. This year under an ACO model, nurses and social workers have helped her stick to a strict regimen of checkups and medications, and her total bills through August were under $7,000.

But juxtaposed with that Gallant is a Goofus. Beck’s “Exhibit B” is a cancer sufferer who also has mental-health issues; after two surgeries this winter, this patient has been skipping follow-up visits and ignoring phone calls from care coordinators, according to hospital officials. She’s also had five E.R. visits and two hospital readmissions that Mount Sinai says wouldn’t have been needed if she’d played ball. Her Medicare tab for the year so far: About $70,000.

In her case, of course, it seems likely that the mental-health issues are the harmful wild card. Still, experiences like this help explain why the experimental Medicare ACOs have been having mixed results so far. Earlier this summer, Medicare reported that 18 of the 32 health systems in its pilot program had generated substantial cost savings, while two had seen substantial spikes in spending; the rest more or less broke even. Even if progress is tenuous, some doctors believe that that the system will need to stick with the ACO model, and convert patients to it: As one Mount Sinai physician tells Beck, “We’re living in a fee-for-service world that doesn’t work.”

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Encore looks at the changing nature of retirement, from new rules and guidelines for financial security to the shifting identities, needs and priorities of people saving for and living in retirement. Our lead blogger is editor Matthew Heimer, and frequent contributors include editor Amy Hoak, writer Catey Hill, and MarketWatch columnists Elizabeth O’Brien, Robert Powell and Andrea Coombes. Encore also features regular commentary from The Wall Street Journal retirement columnists Glenn Ruffenach and Anne Tergesen and the Director of the Center for Retirement Research at Boston College, Alicia H. Munnell.